Flav-O-Rich, Inc. v. N.L.R.B.
| Decision Date | 01 March 1976 |
| Docket Number | FLAV-O-RIC,INC,No. 75-1032,75-1032 |
| Citation | 531 F.2d 358 |
| Parties | 91 L.R.R.M. (BNA) 2545, 78 Lab.Cas. P 11,300 , Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent. |
| Court | U.S. Court of Appeals — Sixth Circuit |
John S. Greenebaum, Barnett, Alagia, Greenebaum, Miller & Senn, D. Paul Alagia, John S. Keck, Louisville, Ky., for petitioner.
Elliott Moore, Deputy Associate Gen. Counsel, Robert G. Sewell, Charles A. Shaw, N.L.R.B., Washington, D.C., for respondent.
Before PHILLIPS, Chief Circuit Judge, and CELEBREZZE and MILLER, Circuit Judges.
This case is before the Court on the petition of Flav-O-Rich, Inc., to review two related orders of the National Labor Relations Board. The first challenged order was issued on August 19, 1974 following the Board's decision that Petitioner had violated section 8(a)(5) and (1) of the National Labor Relations Act, 29 U.S.C. Sec. 158(a)(5) and (1) (1970), by refusing to bargain with a union certified as collective bargaining representative for a number of its employees. 1 The second order for which review is sought was issued on October 31, 1974 wherein the Board denied Petitioner's Motion to Abate Proceedings and Reopen the Record to receive the results of an employee poll which indicated that the Union had lost its majority. The Board has filed a cross-application seeking enforcement of its bargaining order. This Court has jurisdiction of the proceedings under section 10(e) and (f) of the Act, 29 U.S.C. Sec. 160(e), (f) (1970), because Flav-O-Rich is a Kentucky corporation with its principal place of business in Louisville, Kentucky and because the alleged unfair labor practices occurred in part at the Company's facilities in Bristol, Tennessee.
The controversy arose when Flav-O-Rich, a company engaged in processing and distributing milk in Kentucky, agreed to purchase the milk processing and distribution assets of the Leatherwood Company, a smaller enterprise which provided a similar service to communities in West Virginia, Virginia and Tennessee. After the purchase agreement had been finalized, Teamsters Local 175, 2 the certified bargaining representative for most of Leatherwood's employees since May 28, 1971, contacted Flav-O-Rich and requested it to bargain over the collective bargaining agreement which was due to expire on November 30, 1973. Flav-O-Rich declined to bargain with the Union indicating that it had no duty to bargain because it was not a "successor employer" to Leatherwood and because it had a "good faith doubt" that the Union continued to enjoy majority status among the employees. On November 1, 1973, Flav-O-Rich acquired the distribution and processing assets of Leatherwood. The Company persisted in its refusal to bargain with the Union over renewal of the contract. It also rejected a Union request to bargain over the effects of its decision to close its distribution depot at Bluefield, West Virginia.
After unfair labor practice charges were filed and a hearing was held, an Administrative Law Judge concluded that Flav-O-Rich was a successor employer to Leatherwood and we affirm this finding. The Board also affirmed the Judge's conclusion that Flav-O-Rich had violated Sections 8(a)(5) and (1) of the Act and ordered the Company to bargain with the Union. Sometime after the Board's decision and the posting of appropriate notices, the Company claims that it received new evidence that the Union no longer enjoyed majority support. In order to test the Union's majority status, the Company conducted a poll of the employees in the bargaining unit which it asserts conformed to the requirements set forth in the Board's decision in Struksnes Construction Co., Inc., 165 NLRB 1062 (1967). The poll indicated that an overwhelming number of employees did not support the Union. Armed with the results of the poll, the Company filed with the Board a Motion to Abate Proceedings and Reopen the Record to receive evidence of the Union's lack of support. The Company also petitioned for an election to test the Union's support.
On October 31, 1974, the Board summarily denied the Company's Motion to Abate Proceedings and Reopen the Record without providing a statement of reasons for the denial. Simultaneously, the Regional Director dismissed the Company's election petition. The Company thereupon petitioned this Court to review the orders of the Board. After filing of the record in these proceedings, the Board requested that it be allowed to withdraw the record in order to reconsider the Company's Motion to Abate Proceedings and Reopen the Record. The stated reason for the Board's request was that its records did not disclose whether the members of the Board who had originally decided this case had personally considered the Company's Motion to Abate and Reopen. 3 This Court denied the request to withdraw the record. Notwithstanding our denial of the request, the Board has apparently drafted an order reconsidering and denying the Company's motion signed by three members of the Board and purporting to explain the basis for the dismissal of the original motion. 4 this order is patently defective since it was entered at a time when the Board was without jurisdiction to modify its earlier decree. See 29 U.S.C. section 160(d) (1970); 29 C.F.R. 102.49 (1974). Its only relevance to this inquiry is to convincingly demonstrate that the Board has failed to recognize the seriousness of the procedural irregularities which have occurred in this case.
Petitioner cites two procedural errors as bases for denying the Board's request for enforcement of its orders: 1) the order denying the Motion to Abate Proceedings and Reopen the Record completely lacked a statement of reasons for the denial, and 2) there is no evidence that the Board members charged with the responsibility of ruling on the motion ever personally considered the motion and decided that it should be denied. We agree with Petitioner that the present procedural posture of the case renders the Board's orders inappropriate for enforcement.
The Administrative Procedure Act, 5 U.S.C. section 557(c) (1970), 5 requires that the NLRB state reasons for denying a party's motion to reopen. Weltronic Co. v. NLRB, 419 F.2d 1120, 1124 (6th Cir.1969). Even before enactment of the Administrative Procedure Act, the Supreme Court had held that the Board must disclose a reasoned basis for its decision before a court will effectuate its orders. Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 196-97, 61 S.Ct. 845, 85 L.Ed. 1271 (1941). The requirement that an agency state a reasoned basis for decision is an important element in the process of administrative adjudication and judicial review. See Baltimore & O.R. Co. v. Aberdeen & Rockfish R. Co., 393 U.S. 87, 92, 89 S.Ct. 280, 21 L.Ed.2d 219 (1968). See generally 2 K. Davis, Administrative law Treatise Sec. 16.12 (1958) (hereinafter Davis). 6 Disclosure of the reasoning underlying administrative decision-making facilitates judicial review in numerous ways: it informs the parties and the reviewing court of the grounds for disposition of the case below, see e.g., Borek Motor Sales, Inc. v. NLRB, 425 F.2d 677, 681 (7th Cir.1970); it exposes and deters arbitrary administrative actions, see e.g., Morton v. Delta Mining, Inc., 495 F.2d 38, 42 (3d Cir.1974), cert. granted, 420 U.S. 906, 95 S.Ct. 824, 42 L.Ed.2d 835 (1975); and it prevents both the agency and the court from exceeding their respective jurisdictions. See e.g., Phelps Dodge Corp. v. NLRB, supra at 197, 61 S.Ct. 845; American Federation of State, County and Municipal Emp., AFL-CIO v. City of Cleveland, 484 F.2d 339, 346 (6th Cir.1973). Cf. 2 Davis Sec. 16.05.
The most important function to be served by a statement of the Board's reasons for denying Petitioner's motion to reopen would be to provide a basis for review. Cf. In re Boston & P.R. Corp., 428 F.2d 159 (1st Cir.1970). Our scope of review over administrative determinations is limited and we are entitled to have the benefit of the Board's expertise in this area before we are called upon to rule on important questions of law and policy. As Mr. Justice Cardozo aptly expressed it in United States v. Chicago, M., P. & R.R. Co., 294 U.S. 499, 511, 55 S.Ct. 462, 467, 79 L.Ed. 1023, 1032 (1935): "We must know what a decision means before the duty becomes ours to say whether it is right or wrong." See also Sec'y of Agriculture v. United States, 347 U.S. 645, 654, 74 S.Ct. 826, 98 L.Ed. 1015 (1954); NLRB v. Madiosn Courier, Inc., 153 U.S. App.D.C. 232, 472 F.2d 1307, 1326 (1972). We are not free to speculate on the basis of an order, see Great Lakes Screw Corp. v. NLRB, 409 F.2d 375, 379 (7th Cir.1969), nor may we substitute our judgment for that of the Board. See American Federation of State, County and Municipal Emp., AFL-CIO v. City of Cleveland, supra at 346.
Counsel for the Board has suggested that the Court has the power to enforce an order of the Board even though it lacks a stated basis for decision if the reason for the Board's action is self-evident. Our decision in Weltronic Co. v. NLRB, supra, was cited to support that proposition. We do not belive that Weltronic is controlling in this instance. In Weltronic we indulged the presumption the presumption that the board's unstated reason for denying the union's motion to reopen was because the company had already filed in this Court its petition for review of the Board's order. We regarded this as a valid reason for denying the motion which was firmly grounded in the Act and Board regulations. 7 Here, by contrast, Counsel asks us to hold, on the basis of an incomplete record, that the legal arguments advanced by Petitioner are so obviously without merit that they are not worthy of discussion by the Board. This we decline to do. Although we do not, at this time, express any opinion on the validity of Petitioner's arguments, we are not free to accept "appellate counsel's...
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